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13 January 2015

The National Employers’ Association of South Africa’s (NEASA) is adamant that it will hold the National Union of Metal Workers of South Africa (NUMSA) to a deal whereby the union agreed to NEASA’s 2014 demands on a wide range of issues.

Two weeks after NUMSA capitulated to NEASA’s 2014 demands, the Minister of Labour signed a notice by which she extended the July 2014 Seifsa/trade union agreement to non-parties, effective from 5 January 2015. However, NUMSA, in correspondence directed to NEASA and under oath in Labour Court proceedings in Johannesburg, nationally and unconditionally, in order to have the NEASA lock-out of its members stopped, capitulated to the NEASA demands tabled during the 2014 Metal Industry negotiations and confirmed in NEASA’s July 2014 lock-out notice directed to NUMSA.

The NEASA demands, which NUMSA agreed to, include the following:

  • a 7% across the board wage increase;
  • a 50% reduction of the entry level wage (for new employees) in respect of the three lowest wage categories;
  • a completely revamped exemptions policy, providing, amongst others, for an automatic exemption for businesses employing 50 or less employees, on a permanent basis, from the provisions of the MEIBC Main Agreement.


The Metal Industry finds itself in an unprecedented bizarre situation: NUMSA capitulates to NEASA’s 2014 demands but then attempts to enforce an Industry destructive agreement with the federation Seifsa on the other 85% of the Metal Industry, including NEASA, through the Minister of Labour and the utilisation of an undemocratic provision in the Labour Relations Act, which completely negates the interests of the overwhelming majority of employers, mainly SMME’s,’ says Gerhard Papenfus, NEASA Chief Executive.

NEASA deplores the abuse of the imbalance of power.

This is an indication of how big business, in this case collectively representing at most 15% of business’ in the Metal Industry, with the help of trade unions and influential people in key positions, can control the labour market, increase their market share by keeping competition out and even forcing SMME’s out of business. The result is increased unemployment and widespread socio-economic hardship,’ says Papenfus.

There is not a single similarity between the July 2014 agreement NUMSA entered into with Seifsa and NUMSA’s December 2014 capitulation to NEASA’s demands. However, it is the NUMSA/Seifsa agreement which is now enforced upon the Metal Industry, an agreement which Seifsa admitted they ‘agreed to reluctantly’ and which would ‘cause massive job losses’.  The previous Governor of the Reserve Bank has also described this type of agreement as unsustainable.

SMME’s cannot accept this business and job destroying arrangement entered into by big business and big trade unions extended to them through undemocratic, unconstitutional and manipulated processes. Proceedings are currently underway to set aside this agreement,’ Papenfus said.

‘If government is serious about job creation, they will change the draconian provisions in the LRA which enable big business to prescribe employment and business destructive terms to SMME’s and the labour market in general,’ Papenfus says.

These events come on the back of the Labour Court in Johannesburg setting aside the 2011-14 Metal Industry Main Agreement in December 2014. In setting aside the 2011-14 Agreement, the Labour Court found that the Agreement which the Minister of Labour extended was never even concluded under the auspices of the MEIBC. The Court also severely criticised the MEIBC and the Department of Labour for the irregular way in which it sought extension to non-parties of the Seifsa/trade union agreement.

*** Supporting documents regarding NUMSA’s agreement to the NEASA demands can be provided upon request.